Federal Reserve's Jerome Powell Signals Potential Interest Rate Cuts

Federal Reserve Chair Jerome Powell indicated that recent inflation data increases confidence in the Fed's ability to control price hikes. This may prompt future interest rate cuts. Powell, along with other Fed officials, is set to provide more insights before the July 30-31 meeting. The current policy rate remains unchanged since July last year.

Federal Reserve Chair Jerome Powell indicated on Monday that recent U.S. inflation data from the second quarter increases confidence that the pace of price hikes is stabilizing, suggesting interest rate cuts may be on the horizon.

Speaking at the Economic Club of Washington, Powell highlighted the three positive inflation readings and expressed greater confidence in returning to the Fed's 2% target sustainably. This marks a departure from the lack of progress in the first quarter.

The Labor Department reported a month-to-month decline in the Consumer Price Index for June, the first in four years, fueling expectations of an upcoming policy adjustment. Fed officials' comments this week will further shape expectations ahead of the July 30-31 meeting, where a potential rate cut could be signaled.

(With inputs from agencies.)